This pandemic has given a deadly blow to the tourism and aviation industry. It is undergoing a huge crisis with a financial loss of over $3 billion. To counter the spread of Covid-19, every country announced a complete lockdown, and travel restrictions were imposed. Airports give a deserted look, as not a single international and national flight is operating. Under such a situation, the future of the aviation sector and its employees look bleak. Businesses are shutting down, people are losing their jobs and a bigger recession is on the way.
Both domestic and international airline operations are closed by the Indian authorities after the sudden breakout of covid-19. Thus, aviation sector incurred huge losses worth billions. The situation was still the same after the operations were resumed. Lack of purchasing power due to due loss in business and jobs as people avoided travel and passenger demand remained low. As a result of this all airlines are forced to send back their leased aircraft to lessors and are planning operations with a limited number of aircraft. Airlines have to slightly change their strategy and operations. Many airlines preferred to operate New fuel-efficient planes over older aircraft. “The situation might remain same for the rest of the year and airliners across the world and Indian carriers will bear huge losses.
Passenger traffic at Indian airports will remain low in the first half of FY21 and the situation might change in the second half depending upon covid containment. Passenger traffic across India is estimated to decline by 45-50% in FY21. This is very dangerous for Aviation sector. International travel will be dependent on lifting of travel restrictions by countries, which is likely to happen in phases.
The stats are out and this is really worrying for the India government. India’s aviation industry is likely to post losses of $3 billion-3.6 billion. And the loss might double if the travel restrictions are not lifted by end of the year. Domestic airlines have incurred losses of more than $1.75 billion. And airports and concessionaires have to bear losses between $1.50 billion-$1.75 billion. Other firms like Ground handling and airport management may report a loss of $80 million-90 million.
The government and the aviation ministry should bail out the aviation industry by announcing a special package. In the absence of a sufficient government bailout package, airlines forced to reduce costs, while gradually scaling operations. Domestic airlines are also seeking volume discounts from vendors, renegotiating payment terms and seeking a waiver on annual cost escalations for high-cost components.
International tourism and international education industry is also suffering due to travel ban. Governments of countries should plan and decide the future. Travel restrictions should be lifted soon as any delay in lifting the travel ban might kill the entire Aviation industry. Government should bail out aviation sector and its employees by announcing a special package. Aviation Industry is the backbone of the Indian economy and efficient measures should be taken to revive it. Further, the future of aviation sector employees must be safeguarded, so they can give their best when the flight operations resume.
Yukti Kumar @ Samacharline